Trial to give foreign financial firms national treatment

The State Council of China agreed on Monday on a guideline on deepening and expanding trials on the opening of services sector in Beijing, with most opening-up measures rolled out for the first time, which will enable foreign financial institutions to enjoy pre-establishment national treatment in pilot programs.

Analysts said that the guideline represents China’s leapfrog opening-up in the financial services sector, and it also paves the way for overseas companies to launch IPOs in China’s A-share market. The move also showcases the world’s second-largest economy’s unwavering commitment to opening-up and attracting foreign investment amid the US’ relentless push for decoupling with China.

The guideline was released amid the ongoing China International Fair for Trade in Services, the first major in-person international trade fair in China following its effective containment of the COVID-19 outbreak.

According to the guideline, Beijing will support foreign-invested institutions to participate in the overseas investment pilots of qualified domestic limited partners. Also, Beijing will set up a services platform for foreign-invested companies that aim to list in the A-share market and provide relevant services, which analysts said will offer a way for foreign companies to raise capital in China’s Shanghai and Shenzhen bourses.

Analysts said the guideline represents China’s new height in financial opening-up, which is another milestone after the country completely scrapped shareholding restrictions on foreign capital in the financial market.

Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times on Monday that such opening-up is a top-level macro strategy based on China’s own speed.